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Fall 2009 OMS 551 Final Examination

Answer Document Cover Sheet
Please complete the information indicated and include this page with your submission

Name: ___________ ID#____________

Date Exam Taken ________ Start Time________

End Time _________
Secret Code _________ 2.5 hours allowed!
Secret Code Please enter a 4-8 number/letter string that I can use for posting grade information. Use last 4 digits of ID # if you can’t think of anything else.
Submissions: Return your answer document to me in one of these ways: • email to jerics@umich.edu (preferred), with attached answer files named as follows: surname*** where *** is anything you want—just be sure to start with your surname! • fax to 734-764-2555, Hand-carry to office Ross 4478 • Place in mailfolder SVAAN in Facilities Office area, Evening MBA section • hardcopy regular or express mail to Eric Svaan Ross 4478 701 Tappan Ann Arbor MI 48109-1234

• Due Date 17 December 2009

|Part |Name |Max Pts |Points Earned |
|1. |Project Analysis |25 | |
|2. |Supply Chains in Hard Times |74 | |
|3. |Narayana Hospital |50 | |
| | | | |
| |Total |149 | |
Exam Questions:
0. Record Name, ID, Start time NOW, End time & Secret Code Later on Cover Sheet.
Part 1. Project Analysis (25 points) 1a. How many weeks do you expect the project to take at normal duration (without unexpected delays or crashing?) (3 points)
|Answer : |Show work (2 points) |
|(1 point) | |

1b. How many weeks after its Early Start Time could the start of activity C be delayed without delaying project completion? (3 points)
|Answer : |Show work (2 points) |
|(1 point) | |

1c. Suppose that the project manager must pay a penalty of $3000 for each week of project duration past 15. Show the actions you would take to complete the project most cost-effectively (6 points)
|Step |Duration |Critical Path(s) |Action |
|0 | | | |
|1 | | | |
|2 | | | |
|3 | | | |
|4 | | | |

1d. Fill in the empty cells. (1 point/box, 6 total)
|Measure \ Proj |A |B |C |
|PV |120 |100 |110 |
|EV |90 | |120 |
|Actual |100 |135 | |
|CV | | |-20 |
|SV | |50 | |

1e. Enter project letters in the table below showing how you expect these projects to finish with respect to schedule and cost. (1 point/box, 3 total)
| |Under budget |Over budget |
|Early | | |
|Late | | |

1f. Assume that the original schedule time/cost of project B was 9 months, $450 million. What are your revised time and cost estimates for project B based on the partial information given above? Justify briefly. (4 points)

Part 2. Supply Chain Management in Hard Times (74 points)
Questions for this part are based on the articles “Clarity Is Missing Link in Supply Chain” (Clarity) and “Airbus Aims to Pull Back Without Stalling” (Airbus)
2a. The Nodes in the Chain In the Clarity article many firms and roles in the SC are mentioned:
|Supply Chain (SC) Roles |Firm names / descriptions |
|Chip Designer, Chip Manufacturer, Device assembler, Device |Angelo Grestoni’s machine shop, Applied Materials, Asian gizmo |
|Designer/Brand Manager, Manufacturing Equipment, Mfg Eq. |manufacturers, Best Buy, Toshiba, Samsung, TSMC, Zoran |
|parts supply, Retailer | |

Fill in the table below with SC roles and firm names and/or descriptions at each of 7 stages, where the retailer at stage 7 is supplied by the firm at stage 6, stage 6 is supplied by firm at stage 5, etc. then in the RH column, enter the % change in business level in 2008, compared with previous times (1 point per box, 20 total)
|Stage # |SC Role |Firm name or description |% Change in business 2007-2008 |
|1 | | | |
|2 | | | |
|3 | | | |
|4 | | | |
|5 | | | |
|6 | | | |
|7 |Retailer | | |

2b. Bullwhip Effects in Clarity: cite from article & discuss briefly (4 points & ~30 words per box, 8 total)
|Evidence of Bullwhip Effects: |
|Underlying Causes: |

2c. Bullwhip Effects in Clarity: cite from article & discuss briefly (6 points & ~40 words per box, 12 total)
|Effects on Total SC Profit: cite and describe profit impacts on 2 nodes in the chain: |
|1. |
|2. |
|Countermeasures that could be taken to Lessen the Bullwhip effects: Cite and describe 2 |
|1. |
|2. |

2d. Pull back, no stall @ Airbus Discuss briefly Airbus’s supply chain management from the point of view of the articles titled below (4 points & ~30 words each, 8 total)
|Read A Plant – Fast! |
|Strategic Sourcing |

2e. Compare and Contrast the Airbus and Clarity SC Stories: part 1
Fill in the table briefly (1-5 words per box, 1 point per box, 8 total)
|Supply Chain Feature |Airbus |Clarity |
|Product Complexity | | |
|Customer Power | | |
|Manufacturing Lead | | |
|times | | |
|Product Life Cycle | | |

2f. Compare and Contrast the Airbus and Clarity SC Stories: part 2. Discuss the differences in how these 2 SCs manage in hard times, in ~20 words and 2 points/box, 18 total.
|System Feature |Clarity SC Actions |Airbus SC Actions |Explain reasons for difference |
|Workforce | | | |
|Inventory | | | |
|SC Node stability | | | |

Part 3 Narayana Hospital (50 Points)
Answer these questions related to the article “The Henry Ford of Heart Surgery” a. Number crunching: Narayana hospital had 42 cardiac surgeons in 2008, working in 24 Operating Rooms (ORs), performing ~600 operations per week. Fill in the RH Table column below (2 points/box, 10 total)
|Measure |Value and brief support (2 points/box |
|Total annual Operations | |
|Total annual revenues from | |
|Operations | |
|Daily operations per Surgeon | |
|Daily operations per OR | |
|Surgeon salary per operation | |
|Upper bound on average | |
|patient stay @ hospital | |

b. Sigma Quality: Suppose that even with perfect surgery and hospital care, 1.2 % of coronary artery bypass surgery patients will die within 30 days. Thus, a mortality rate higher than 1.2 % represents the combined surgery/hospital care defect level. What is the implicit sigma level of Narayana’s coronary artery bypass operations? Discuss for the stages (surgery/care) and overall in ~40 words for 4 points

c. Value Creation and distribution: Viewing the Narayana operations as value-creating nodes in the health supply chain, comment briefly (~20 words/box) on how the value created is apportioned to various groups listed below. 2 points/box, 14 total.
|Narayana Itself | |
|Patients | |
|Workers | |
|Suppliers | |
|Investors | |
|Mangers | |
|Society | |

d. Cite and discuss 2 features of the Toyota Production System that are reflected in the Narayana system. (1 point for feature citation, 2 points for ~20 words discussion of each, 6 total)
|TPS Feature 1: |Discussion (~20 words) |
|TPS Feature 2: |Discussion (~20 words) |

e. Comment briefly on Narayana’s strategic positioning in the Structural categories below. ~ 30 words, 3 points per box, 12 total
|Capacity |
|Facilities |
|Technology |
|Value Stream positioning |

f. Is Narayana a World Class Hospital Operation? Comment briefly for 2 points
| |